The Impact of Antidumping Measure on Indian Imports of Raw Silk from China: An Economic Analysis

Abstract

Globalization has led to increase in the trade between countries but it has resulted in several other new issues, one such issue is dumping of goods. This paper analyses the impact of anti-dumping duty imposed by India on the imports of raw silk from China during 2003 to 2013. There are certain exceptions, despite the fact that free trade is expected from the members of the World Trade Organization (WTO). One concern is that goods are being dumped in the foreign market, i.e. the exporter sells his product at a lower price in the foreign market than that prevailing in the home market. Article VI in GATT regulates this together with the Anti-dumping Agreement. In 2003 and 2013, Indian imposed an anti-dumping duty on raw silk imported from China. This measure was effective until 2014. As a result of this duty, it is expected that the imports of Chinese raw silk by India should have decreased. Accordingly by using a multiple regression analysis, we observed that the imports of Chinese raw silk to India decreased significantly. Since the industry’s overall sales in India increased during the same period, it can be concluded that imposition of anti-dumping duty has met its objectives.